Chronicle of the Month – December 2008

The future of developing countries and today’s financial crisis
By Thierry Dime Bolla

Since last summer, the whole world is facing a financial crisis that shakes off capitalism. Some governments want to be reassuring, but the reality proves the opposite. All financial centers are in red and confronted to huge difficulties. In spite of enormous amount injected these last weeks, markets are still not stabilized and the threat of a world recession seems to be probable. This will have serious consequences on the international market as the world will slip from a financial to an economical crisis.

If we have to face an economical crisis, the situation of developing countries will be more serious as they are dependent of the world economy and especially on the help of rich countries through different development program. These helps might be reduced or even cancelled.

If we take education and although overall access to basic education has risen substantially over the last decade in many developing countries, the poor are still less likely ever to attend school, less likely to be currently attending school, and more likely to repeat grades than those who are wealthier. Education patterns among the poor differ distinctly by region. In South Asia and in West and Central Africa, a large minority of children from poor households never enrol in school. In Latin America, in contrast, virtually all children complete the first grade, but subsequent dropout rates are high. For example, 92 per cent of 15 to 19 year olds from poor households in Brazil complete first grade, but only half complete grade five. In other developing regions the pattern among the poor is characterized by higher proportions ever enrolling and later dropout.

Cost reduction or cost cut to development help will penalize the future of young people in these countries. This is why it is important to be aware that the resolution of the crisis must be multidimensional and take into account not only the financial sector, but the system as a whole. Only set up of new rules will be able to help put in place roots to a better world.